May 17, 2020

House Passes Gulf Drilling Legislation: Oil Price Drops

Oil
Drilling
exploration
Offshore
Admin
2 min
U.S. House of Representatives passes legislation to expedite offshore drilling in the Gulf of Mexico.  Crude oil price drops as a result.
Yesterday, the Republican-led United States House of Representatives passed legislation to speed up the permit process for offshore oil exploration an...

 

Yesterday, the Republican-led United States House of Representatives passed legislation to speed up the permit process for offshore oil exploration and drilling in the Gulf of Mexico.  The legislation also opens up offshore exploration off the coast of the state of Virginia.  As a result, crude oil prices came tumbling down nine percent.  This has average Americans hoping that this will translate to lower prices at the pump.

House member Michael Burgess (R-Texas) states, “Here we are in the Senate today, and I would just mention to the Senate that our bill yesterday to expedite lease sales in the Gulf of Mexico, those very leases that have been delayed or canceled by the administration in the past year.  The fact that we're willing to expedite those lease sales had a profound effect on those people who like to speculate and hedge in the oil market.”

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The Republican majority has been claiming that reopening offshore exploration in the Gulf would affect speculators in such a way that oil prices would fall, and the dramatic drop below $100 per barrel witnessed today reveals just that. 

However, the bill still faces a majority Democratic opposition in the U.S. Senate and White House.  Plus, the Federal Energy Information Administration has stated that major expansion in domestic offshore development would have little impact on world oil prices or U.S. gasoline prices. 

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Jul 26, 2021

Ofwat allows retailers to raise prices from April

Ofwat
Utilities
water
prices
Dominic Ellis
3 min
Ofwat confirms levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue

Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.

The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.

Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.  

In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue. 

Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”  

There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:   

  1. Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps. 
  2. Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold. 
  3. Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice. 

Further consultation on the proposed adjustments to REC price caps can be expected by December.

United Utilities picks up pipeline award

A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.

The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.

“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.

Camus Energy secures $16m funding

Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent VenturesWave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.

As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.

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